Banks failing... Wall St in crisis; Is it finally acceptable to criticize capitalism?

Few topics inspire as much fervor and unprincipled rhetoric as capitalism. Free market barons trumpet the faceless expansion of multinational corporations and lambast any environmental or labor regulation as an undemocratic assault on economic freedom. Critics of capitalism, on the other hand, have become as taboo in mainstream media as frank discussions of sex were during the Production Code.

The latter group boasts Seymour Melman, a professor of industrial engineering at Columbia University, who has long criticized American capitalism as alienating, militaristic, increasingly inequitable, and economically inefficient...

We could build a new society for $700 billion. Don't bail out the banks, buy them. Give home owners new loans. If they don't have jobs, start a public works program -- there's plenty of work to do -- fix roads; clean up the environment, teach school, and 100s of billions to spend to pay salaries.

Sure, I"m not an economist, so let me stop talking and just remind you that there are experts who know how to move us to a better system, we just have to start examining some of our decades-old taboos.

5 comments:

The question I have is what happens AFTER you buy the banks? Does the corruption of human values that the banks now represent move to the buyers, or do you somehow cleanse capitalist principles in the process? Destruction of the existing order with no plans for the reconstruction, sounds familiar.

"does the corruption of human values that the banks now represent move to the buyers"

As you indicate, the hard problem is to change societal values.

Under American capitalism, greed and emphasis on self-interest are not just tolerated, they are celebrated as the ideal, necessary substrate for economic functioning. Capitalists argue for this by saying that self-interest is human nature, that humans are naturally competitive. But no anthropologist would put matters this simply. It might be more realistic to say that humans crave social status (like a monkey troupe). If the primary route to social success and social security is financial wealth, then many will scurry, cheat and exploit in order to obtain wealth. But if the route to social security and status is philanthropy, loyalty, fixing global warming, being viewed as a good person, etc., then people will scurry to do these things.

So, Americans generally live up in a wealth-lusting culture. But how to enact a "cultural revolution"?

Not every monkey wants to be the silverback, but you have to have some who do or you never get a leader for the followers to follow, and the whole troupe suffers. In other words, successful people crave success, but others maybe not so much. Not all humans are the same.

I like your goal substitutions, and as a privileged white male, I'm able to subscribe to all of them. But only because I first got my privilege by following the rules of the capitalist world around me. And that capitalist system does put out, as worthy goals, philanthropy, loyalty, and care of the environment, together with moral rectitude (my bank's employment contract says I can be fired for moral turpitude!) and giving back to society (I have colleagues who have garnered much respect by teaching on the side, or between jobs). Lack of philanthropy is looked down on in American capitalism, lack of loyalty is disqualifying, and global warming, well, there's some bad apples.

But everyone can't be a philanthropist, who would you give to? And you can't be a philanthropist unless you have something to give away, money, skill, whatever. How do you get that in the first place so you can give it away? And there's a definite philanthropic mindset that comes out of capitalism, and doesn't from more egalitarian systems. You'll find people who grew up in states that enforced communism much less willing to give anything away: Russian and Chinese billionaires, formerly the proletariat, are no Bill Gates.

Universal loyalty, that's an interesting concept, but I'm not sure how it feeds into a utopian world. Plus, loyalty to one means disadvantaging another. Perhaps you mean something else, but it evokes feudalism in my mind.

Fixing global warming would be nice, but it can be done with capitalist methods as well as anti-capitalist methods, so it's not a replacement. One hope is that people will try to make money by inventing, and selling, a better solar panel or wind turbine, and that's capitalist. How does a non-capitalist system advance knowledge and technology? Are there any good examples? Of course, you can fix global warming by destroying industry, see Khmer Rouge methodology.

So maybe we don't need a revolution, but a continuing evolution. Certainly our capitalism is more in line with humanist values than the version of the early 20th century. The upcoming depression will perhaps give the politicians cover to incentivize the striving classes further away from greed and self-interest. But damming (and damning) the source of wealth will not lead to utopia.

You have a lot of great food-for-thought here, but for now, let me just address one part, as it corresponds to one of my greater areas of expertise.

You wrote: How does a non-capitalist system advance knowledge and technology?

The most highly successful system for advancing knowledge and (some types of) technology currently in existence include non-capitalist systems. I'm thinking of two non-profit institutions, the lauded and justly revered U.S. National Science Foundation and the National Institutes of Mental Health. These institutions make decisions about how to fund research based on peer review of need and scientific merit for the research, not earning potential of products. The result is that the profit-driven capitalist pharmaceutical industry is no match for the innovation and scientific accomplishments of NIH. Market-driven drug companies are best at producing life-style drugs for wealthy people (actually, any drugs for wealthy people, its money chasing dollars) -- and they do this very, very well, I admit.

This is because market systems, by definition, do not notice or attend to human factors; it is as "good" for the market to make $1000 in profit by meeting the needs of a single wealthy person as it is to make $1000 in profit by meeting the needs of 1,000 non-wealthy people.

It's all linked. If capitalism is "bad," the NIH money is tainted, too. In no small part, it's made up of taxes on bankers' bonuses and other similar uber-capitalistic profits. When the bonuses dry up, so will the NIH money.

One could think of the NIH as being part of the philanthropic impulse of the capitalist system, although it's much more than that. We all want it to find the cure for cancer, of course, but also the cure for our second cousin's daughter's one-of-a-kind disease. It's a capitalist state's philanthropy, where all the little capitalists have deemed that it should be so. I bet someone who's a believer in a pure capitalist system would still find reasoning for the NIH -- I'm not that person, so won't try. But I'm thinking of examples like rich people's interest in having poor people's children vaccinated.

Perhaps another justification is the symbiotic relationship with the more purely capitalistic pharmaceutical industry. The people move between the systems, taking their knowledge from big pharma to academic research and the other way around (mostly the other way, I would think!). New techniques that are developed are mostly shared. And we all move forward together. This is part of what I meant by comparing how our current system is much better than the pure capitalist system of the early 20th century, and how I hope it'll keep evolving. No need to throw it overboard, yet.

Spending too much time on this. Root-canal day. Need to go out and make more money to pay for it...